Three pillars for a successful open banking initiative
At C Minds, we understand that knowledge exchange is a driving force for the advancement of innovation. Keep Up by C Minds is our initiative focused on generating conversations between Mexican and international stakeholders on a variety of topics, from finance innovation to AI.
On June 7th, we invited persons from the Mexican financial ecosystem to our very first Finance Innovation Series talk: “Building the Way to a Successful Open Banking Initiative”, imparted by Carlos Figueredo, Founder and CEO at Open Vector and former Head of Standards at Open Banking Limited. He spoke about international best practices when it comes to open banking and its processes, before setting out 3 pillars for a successful initiative.
THREE RECOMMENDATIONS TO STRENGTHEN OPEN BANKING
No matter the approach, Carlos offered three recommendations to ensure an optimal and successful approach to open banking, which can be applied regardless of the context:
Create laws and regulations to protect all parties involved in open banking: Once those protections are put into place, banks will feel more confident joining the open banking initiative. The good news is that Mexico’s FinTech Law, published in March of 2018, creates this regulatory certainty, setting solid groundwork for the development of open banking.
Don’t forget the consumer: While giving key stakeholders, such as the banks, government officials, and FinTechs, the confidence and tools to take part in the open banking initiative is crucial, it is also important to remember to communicate with customers. It is essential to stress to them how and why they will benefit from what open banking can offer. Too many are unaware of open banking and how securely sharing their financial data can make their lives easier and strengthen their relationships with their banks. Mexico has already taken a head start on ensuring public awareness with an article published by C Minds and PwC in El Universal on the 11th of June, highlighting 3 ways open banking will change consumers’ (financial) life.
Encourage FinTechs to be innovative: The government should provide the tools and means for FinTechs to gain knowledge and be flexible so that they can succeed in this new world of open banking, while banks should be willing to work with and learn from them. It is critical not to stunt FinTechs’ growth. Banks need to start seeing them as the indispensable collaborators that they are to move forward successfully in a disruptive environment and understand that bank/FinTech collaborations a win-win situation for all groups involved, most importantly the consumer. C Minds is already advancing this topic, beginning with raising regarding the potential of open banking for FinTechs in different talks (don’t miss the next one on June 27) before we move into more innovation exercises aimed at financial inclusion.
BRINGING INTERNATIONAL BEST PRACTICES TO MEXICO
By inviting participants from different sectors to join our online sessions, C Minds aims to expand the conversation by providing international expertise to interested parties on the value of open banking and encouraging them to work towards a safer and more innovative system. We understand that open banking is not just confined to a few countries. It is truly an international movement, and the Finance Innovation Series of our Keep Up initiative aims at tapping into that international knowledge to contribute best practices to the government for the development of a Mexican standard.
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If you haven’t already, check out our Report on Open Banking for Mexico, commissioned by the British Embassy and co-developed by C Minds, the Open Data Institute and the Fintech Hub